PRIOR UNCERTAINTY,ANALYST BIAS,AND SUBSEQUENT ABNORMAL RETURNS

In this paper we examine the relation between analysts' overoptimism and uncertainty as proxied by the standard deviation of earnings forecasts. We find a positive relation between overoptimism and uncertainty, but very little or no optimism when uncertainty is low. If the uncertainty surrounding a firm is high, analysts have fewer reputational concerns when they act on their inclinations to issue optimistic forecasts. Portfolio strategies based on these findings generate abnormal returns. The results suggest that greater prior uncertainty leads to higher analyst optimism, which in turn causes market overvaluation and profitable portfolio strategies.     

STICKY PRICES AND COSTLY CREDIT

We develop a theory of money and credit as competing payment instruments, then put it to work in applications. Agents use cash and credit because the former (latter) is subject to the inflation tax (transaction costs). Frictions that make the choice of payment method interesting also imply equilibrium price dispersion. We derive closed-form solutions for money demand, and show how to simultaneously account for the price-change facts, cash–credit shares in micro data, and money-interest correlations in macro data. The effects of inflation on welfare, price dispersion and markups are discussed, as are nonstationary equilibria with dynamics in the price distribution.     

What's in a Name? An Experimental Examination of Investment Behavior

A fundamental unresolved issue is whether information asymmetries underlie investors predisposition to invest close to home (i.e., domestically or locally). We conduct experiments in the United States and Canada to investigate agents portfolio allocation decisions, controlling for the availability of information. Providing participants with information about a firms home base, without disclosing its specific identity, is not sufficient to change investment behavior. Rather, participants need to know a firms name and home base. Additional evidence indicates that participants have a greater perceived familiarity with local and domestic securities and, in turn, invest more in such securities.The authors thank Ann Gillette, Josef Zechner (the editor), and two anonymous referees for helpful comments and acknowledge the financial support of the Federal Reserve Bank of Atlanta, Georgia Tech, and Social Sciences and Humanities Research Council of Canada. The views expressed here are those of the authors and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System.     

A situational analysis of consumer science skills used to improve incomes and create self‐employment in the Limpopo province,South Africa

A two‐phase study was conducted in the Mopani and Vhembe Districts of the Limpopo Province of South Africa to identify types of small‐scale businesses used by households to improve their income. The study sample was made up of 240 households from 16 villages and members from 16 organizations working with households in small‐scale, business‐related activities. Phase one of the study collected data on the types of small‐scale businesses carried out by households and organizations assisting them. Phase two developed training manuals and offered training to households. The findings revealed that self‐employment from sales of prepared and processed foods provided the main source of income for most households. Clothing and needlework and housing and art/craft were also used by families to generate income. Problems experienced included lack of technical/management skills, lack of marketing/business skills, inadequate operational funds, low profit margins, unavailability of raw materials and competition from big businesses. The findings highlighted the importance of consumer science‐related skills in poverty alleviation programmes targeting low‐resource households.     

Achieving financial success for owned physician practices

Techniques that have helped turn around the financial performance of individual physician practices can also be used by hospitals and physicians to stem losses from owned practices: Strengthening collections processes. Setting performance targets and incentives. Instituting monthly meetings that keep providers and staff focused on financial success.     

Do Urban Tax Rates Converge?

A bstract . Using a multiple regression model that seeks to explain why tax rates vary, the hypothesis is tested that similarly sized cities with similar economic functions would tend to have property tax rates that converged. What variations there are in an array of urban tax rates of 20 cities in the 100,000 to 200,000 class seem to be explained by density of settlement and by the extent to which non-property tax sources bulk importantly in total urban revenues. The inference is drawn that convergence is in fact observable. Convergence would, of course, imply tax competition as among these cities.     

增长、平等与治理:拉美的经验

经济增长会给政治管理带来怎样的挑战呢？这正是作者在本文中提出的问题。通过对智利、巴西和墨西哥这三个拉美国家的实证分析，作者认为，执政党要吸纳各种不同的社会力量并且要对收入差距问题予以重视。惟有如此，才能够在经济转型时期实现善治。     

EUROPEAN MARKET INTEGRATION AND THE SMALL NATION

Predictions of Portuguese export market performance consequent on European market integration tended to come up short. To explain why, the author presents and analyzes the technical literature. The author compares the forecasts with actual results and then develops a simple model to extrapolate and replicate the prE-1992 Portuguese experiences. This model builds on relatively rapid growth already under way. The author holds that relative export industry market share as a function of relative sales effort explained export performance. Further, the author argues that four country industry concentration ratios as a function of changes in revealed comparative advantage as well as "home market" institutions explain the competitive situations faced by Portuguese exports both before and after 1992. The concatenation of these four variables yields successive equilibria.